British government says 'Google Tax' will come into effect next month

LONDON — George Osborne confirmed in Wednesday's Budget speech that the so-called "Google tax" will come into affect next month.

The Chancellor of the Exchequer used the final Budget before the general election in May to announce that the Diverted Profits Tax, which is "aimed at large multinationals who artificially shift their profits offshore", will be introduced from April 1.

The tax was flagged during the Autumn Statement in December 2014, and levies a 25% charge on companies who divert their profits overseas through complex business structures to avoid paying UK tax. Google, Starbucks and Amazon have all been attacked for the practise.

Osborne also announced a broader crackdown on tax avoidance and evasion, which he promised would raise £3.1 billion, and a rise on the rate of bank levy to .021%, which he insisted would raise an additional £900 million per year.

Chancellor of the Exchequer George Osborne stands with his Treasury team outside 11 Downing Street, London.

Image: Jonathan Brady/PA Wire/Associated Press

During the speech he also promised investment in the "Internet of things" and online access.

He said the government would commit up to £600 million to improving broadband across the country, boosting speeds to 100 megabits per second to put Britain "out in front", and would put free WiFi into public libraries.

In a speech riddled with digs at the opposition he tried to explain the "Internet of things" with a reference to the recent revelation that Ed Miliband has two kitchens.

"To use a completely ridiculous example," he said, "were someone to have two kitchens they would be able to control both fridges from the same phone."

Miliband criticised the Budget saying: "this is a Budget people won't believe from a government that's not on their side."

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